When asked to look five years out, the panelists talked about an array of business opportunities. Gary Weiss, Managing Director of Teton Energy Partners, spoke of behavioral change. Energy efficiency won't have a large impact on energy, he said, until energy users have access to real-time information about their power consumption.

Solar power pioneer and OutBack Power President Robin Gudgel thinks the US will adopt incentives similar to those in Europe, where governments have made significant long-term commitments to renewable energy. German farmers who install solar arrays sell their power at a premium. As the US realizes the need for renewable power, incentives to producers here will justify building independent capacity.

Gregg Semler, CEO of Quantum Leap Technology, said that there are opportunities for energy around the world. He noted that China is planning to spend US $350 billion in the next three years on energy, with even larger commitments within a 15-year horizon. Here at home, our growing dependence on energy -- particularly for computing and mobility -- will put strain on the grid. Fuel cells can relieve the strain by complementing grid power with distributed generation.

Energy is consumed either as electricity or as torque, said Kirk Washington of Yaletown Venture Partners. "Torque" translates to transportation. Electricity comes from coal, he said, adding that in his home province of British Columbia 90 percent of the power comes from hydro. The energy issue that is making headlines this year is the price of oil. That the automotive industry represents a large opportunity because it behaves like a conventional business, and because of the sheer volumes involved (over 50 million new cars a year). In his years at Ballard he tried to replace the internal combustion engine by using fuel cells to deliver torque. The incumbent proved hard to displace. Now he believes fuel cells can lower emissions and raise fuel economy by increasing the efficiency of the incumbent.

An audience member pointed out that if we continue on our current track with natural gas, we will end up in a situation similar to today's oil predicament. We are importing natural gas from unstable countries like Indonesia, he said; as the US and Canada tap out our domestic low-cost energy sources, we will face problems reminiscent of oil crises past and present.

Weiss, formerly CEO of energy services company IPT, discussed the importance of innovative ESCOs and the difficulties they face in advancing the penetration of efficiency measures. Performance contracting should be a no-brainer, he said, but the fundamental problem with efficiency ROI is the difficulty of establishing a baseline for consumption in businesses where demands change due to weather, occupancy, order volume and other outside factors.

Wind energy has the attention of the two investors on the panel. Kirk Washington said solar and wind will be the next big winners in renewables, but there is not much new in these established technologies. However, he said, there are still opportunities to solve problems in those industries and their supply chains. He mentioned the Wind Turbine Company and their partnerships to develop a new turbine. Weiss referred to a technology that uses sonic wave forms for early detection of stresses in the turbine. It would help to predict failures the 200-foot-tall structures, before small problems become serious and costly.

In many alternative energy sources, it's not the innovation that poses the greatest challenge. In the case of wind energy, Washington said startups get stalled in a chasm. Multi-megawatt projects are the domain of large banks and bond issuers, he said, not of upstart companies with unproven technology. Weiss noted that one promising company failed not because of the technology, but because of disagreements among the owners -- a human factor.

The panel agreed that it's possible for entrepreneurs and technologies from outside the energy industry to succeed. Semler noted that the founder of Quantum Leap applied silicon chip manufacturing processes to cut by half the cost of manufacturing fuel cells. Similar thinking led to strides in medical devices, where Semler has spent much of his career.

Washington said there are few experienced entrepreneurs in energy technology because the research and development have traditionally been done in large companies. Whether entrepreneurs and VCs can step in, he said, is still an experiment in this space. Some large companies are acquiring small companies for strategic reasons, but many are not, he added, because of their "not invented here" syndrome.

What advice do the panelists offer to entrepreneurs considering the energy technology space? When investing in energy startups, Washington looks for companies with an industry insider who knows the companies they will be selling into. Otherwise, he wants to see a strategic investor at the table in the beginning with a built-in exit strategy. He also advises finding out if the product solves a real problem. "Mix it up with a customer early," he said, "the sooner the better."

Weiss further stressed the importance of having a strategic partner or first medallion customer. Having a large partner can be a big help with credibility, he said.

Building a working prototype made a difference for Semler in his previous fuel cell company, PolyFuel. By fitting a fuel cell to the back of a cellular phone, he got the attention of major phone manufacturers. When considering joining a company, he advised, a prototype is a reasonable standard by which to evaluate their viability.

Starting and running a small business is a pleasure in its own right for Gudgel, who recommends going without VC if at all possible. In encouraging entrepreneurs to consider solar, he related two interesting facts: there is a worldwide shortage of solar panels, and the largest panel manufacturers in the world are oil companies Shell and BP.

MIT Enterprise Forum once again lived up to its reputation for educational, entertaining programs on technology entrepreneurship, thanks to this panel, its moderator, PS Reilly of the Center for Smart Energy, and the sponsor, P5 Group Inc. We look forward to next year's program on another topic in the energy sector.